It Costs $158,000 to $290,000 to Start a Brewery

Are you looking to start your own brewery? As part of your business plan, make sure to budget for the startup and operating costs to start and run a brewery.

We’ve identified that it costs on average $158,000 – $290,000 to start a 2,000 barrel p.a. brewery plus $93,500 to $118,500 in operating costs per month to run the business the first few months.

Want to know more? In this article we’ll go through all the different costs you will need to incur to start your own brewery. Read on!

For more information on breweries, make sure to read our guides below:
How to Start a Brewery in 9 Steps: Complete Guide
How To Build A Financial Model For a Brewery?
10 Strategies To Increase Your Brewery Sales & Profits
How to Write a Brewery Business Plan: Complete Guide

How much does it cost to start a brewery? Startup costs

Most breweries cost anywhere from $250,000 to $1 million to open. Larger breweries with more varieties of craft beer offerings can cost as high as $2 million. 

As you can see, startup costs vary significantly based on factors like brewery size, capacity, location, equipment and so on.

So, we have decided to give you a clear overview of all the key costs you can expect to start a 2,000 barrel craft brewery below. Note that these costs are for illustrative purposes and depend on a number of factors which might not fully apply to you.

Startup cost	Amount
Machinery and equipment	$150,000 – $250,000
Licenses	$5,000 – $75,000
Software and Point Of Sale System (POS)	$1,000 – $5,000
Marketing	$2,000 – $10,000
Total	$158,000 – $340,000

Brewery machinery and equipment startup costs 

Machinery and equipment are by far one of the largest costs to start any brewery. When it comes to brewery machinery and equipment, the cost depends on:

• The kind of brewery equipment you use
• Brand new brewery equipment or second hand
• Size of the brewery plan

Regarding the brewery equipment, copper and stainless-steel material are the typical choices. Stainless steel brewing equipment is expensive but more durable when it comes to the choice of a brewery. 

Secondly, new equipment costs more than used brewery equipment. However, the brand-new equipment is often in good shape. 

Finally, the size of the brewery is an essential factor that determines the cost of commercial brewery equipment.

If you plan to open a microbrewery, you can settle for the smallest brewhouse equipment with $100,000. Yet, larger breweries with 30-barrel brewing system capacity should expect to pay up to $1 million instead.

Brewery licenses and permits 

Outside of buying brewery equipment and leasing an industrial warehouse, there are many legal issues to handle before opening the doors. Remember: alcohol is a highly regulated industry, and many states have their rules and regulations. 

The cost of licenses and permits depends on the brewery size. Here is an overview of the legal issues to prepare for when you plan to open a brewery:

• Forming a legal entity
• Registering a business name for your brewery
• Trademarking the brewery name
• Registering with the Alcohol and Tobacco Tax and Trade Bureau (TTB)
• Submit the brewer’s notice 
• Obtain the state liquor license 
• Get the brewer’s bond

Given the complexity involved in processing these legal issues, think of hiring a professional company for assistance and faster processing. A professional understands the licensing regulations and is often in a position to help you quickly. 

Here is a breakdown of the costs to expect:

• Liquor license $3,000 to $400,000 (in most states you can settle for $20,000 or less)
• Professional services: $5,000 – $50,000

Marketing and website startup costs

You need a website to reach the online community and tell them about your new business. More importantly, your online presence will first allow you to build trust with resellers (bars, retailers, etc.).

The website design and development budget can cost anywhere between $200 and $1,000, depending on whether you opt for a simple website or an online store.

Signage is another startup cost that we can classify under marketing. Expect to spend up to $5,000 on signage and related offline marketing ads before you open your brewery.

How much does it cost to run a brewery? Operating costs

Now that we have looked at the costs you should expect to start a brewery, let’s now focus on the operating costs you would have to incur each month to keep the brewery running. 

Brewery overheads typically include the raw materials, rent and staff costs. 

Operating cost	Amount (per month)
Raw materials	$40,500 – $47,750
Packaging	$12,500
Staff costs	$25,000 – $35,000
Rent and bills	$2,250
Marketing	$10,000 – $15,000
Insurance	$250 – $1,000
Bookkeeping, maintenance, other	$3,000 – $5,000
Total	$93,500 – $118,500

Brewery raw materials costs

Raw materials are with staff costs, the largest cost for breweries. They include malt, hops and adjuncts. You should expect to pay on average 30 to 35% of your sales in raw materials.

Typically, craft breweries can spend more, closer to 35%. Logically, the smaller the brewery, the higher the cost per barrel (or pound) unlike large regional breweries that can save on large orders.

On average, you will spend around $0.40 per pound in malt and $9.00 per pound in hops.

Now, for our microbrewery example, let’s assume you operate a microbrewery with 10,000 gallons capacity per year. Assuming a selling price of $3.50 per pint, so $800 per barrel more or less (taking into account 8-10% waste), you should generate around $135,000 in revenue each month.

So, assuming we’re a craft brewery, we should expect to spend anywhere from $40,500 to $47,750 in raw materials.

Brewery packaging costs

Packaging is another major expense breweries have to budget for accordingly. It can be the can itself, but any cardboard packaging as well.

On average, if you spend 30-35% of your sales in raw materials, you should spend another 10% in packaging costs. As you see, packaging expenses shouldn’t be overlooked and can significantly impair your profit margin if you don’t budget accordingly

Using the same craft microbrewery example, you should budget around $12,500 in packaging costs.

Rent (or mortgage)

If you are to operate your brewery from an industrial space, consider the rental price or the mortgage repayments price. 

The minimum space to open a microbrewery is 700 to 800 square feet. Locations nearby corporates are an excellent choice for microbreweries as they attract the working population to relax after a long week. 

The approximate cost to rent an industrial space varies based on location. Calculating the industrial lease requires four variables:

• The square footage of the lease
• Base rental rate
• Estimated operating expense
• Electrical and janitorial expenses 

For a leased industrial warehouse, expect to pay on average $0.85 per square foot per month.

So assuming you’re operating a microbrewery with 1,500 square feet, expect to pay around $1,250 in rent each month. Adding bills ($6 per barrel on average) the total cost per month is around $2,250.

Brewery staff costs

The average annual pay for a brewery worker in the United States is $30,874 per year, equivalent to $15/hr. 

A brewery will require a manager and a number of brewers, including a team lead of which the number will logically depend on the size of your brewery. Whilst the manager / owner typically oversees the supply and sales of the output to resellers, the brewers are responsible for the operations.

As rule of thumb, Microbrewr recommends having anywhere from 0.75 to 1.76 staff for every 1,000 barrels you produce per year.

Assuming our 2,000 barrel p.a. microbrewery, you would need around 3 brewery workers plus a manager and yourself. In total you should expect to pay each month anywhere from $25,000 (average salaries) to $35,000 (75th percentile) alone in staff costs (including taxes and benefits).

Brewery business insurance

The cost of a mandatory general liability insurance for a small brewery is around $77-$109 per month and comes with a standard $1M to $2M general liability.

To this you should add additional policies such as Products Liability, Equipment Breakdown, Tank Collapse and Leakage, Contamination and Spoilage and others. 

So the total cost depend on various factors that can easily go up to $1,000 a month. Make sure to contact specialised insurance brokers for an accurate quote for your business.

Brewery marketing costs

In order to promote your brewery and build trust with resellers and consumers, you will need to spend money in marketing and ads. This can either be online (social media, paid ads) and/or offline marketing (billboards, flyers, etc.).

If you plan sell directly to consumers and/or to target consumers specifically, you should expect to spend more in marketing as you will need to reach a larger audience.

As a rule of thumb, you should spend around 8% to 10% of your revenue in marketing each month.